Apple's iPhone Finally Released to China, But Doing Poorly

Apple Inc.'s popular iPhone, finally released to China (officially) through China Unicom LTD. The iPhone may be a record breaker around the world, but it isn't having stunning successes in China.

The iPhone in China, prices range from 4,999 yuan ($730) to 6,999 yuan ($1,025) for the higher end iPhone 3GS 32GB without contract. Unfortunately all of these iPhone don't have WiFi support. Since the official launch of the iPhone in China last week, Unicom has managed to snag only a meager 5,000 sales.

In India, the local unit of Vodafone Group Plc. and Bharti Airtel Ltd. began offering the smartphone in August 2008, only 50,000 iPhones have sold. And the iPhone went on sale in Russia last year, Apple's three partners had each expected to sell millions of handsets. Roughly 400,000 had been sold as of May.

More importantly, the Cupertino, Calif.-based consumer electronics giant has had difficulty penetrating China. Apple's efforts to bring the iPhone to China have stalled amid lengthy discussions with China Mobile Ltd. and China Unicom Ltd., two of the country's top cell phone operators.

Holding the iPhone back: A combination of high prices and lengthy service contracts. In India, a basic iPhone cost about $340, roughly a third of annual per capita income, putting it out of reach for many people. Consumers in India and China, as well as other developing countries, often balk at signing lengthy contracts, preferring pre-paid plans that Apple and its partners have avoided.

The iPhone has helped fuel a more than 60% jump in Apple's shares. On Thursday, Apple shares dropped 0.2% to $139.95.

Apple declined comment for this story

Few countries hold as much potential for Apple as China, where a fast-growing urban middle class has propelled cell phone and computer sales. Apple Chief Operating Officer Tim Cook recently said the company hoped to enter the market next year.